These results for the period ending 30 September are before completion of the merger with Madison and going forward SDX Energy will report quarterly results on a pro forma basis.

Third Quarter 2015 Highlights:

Operational Performance

Production

Total gross production for the quarter averaged 8,324 boepd (832 boepd net); of which oil was 6,924 boepd (692 boepd net) and gas and liquids 1,400 boepd (140 boepd net).

NW Gemsa:

Average daily oil sales volumes for the quarter were 674 boepd;

Unitization discussions with the offset operator continue with an initial agreement expected in the 4th quarter;

A 5 well workover campaign commenced with a 2 well drilling campaign to follow.

South Disouq:

Terms of a 300 km2 3D seismic acquisition contract were agreed;

Acquisition operations are anticipated to begin in the 1st qtr of 2016 and take 4 months.

South Ramadan

The first phase (time) data of the reprocessing effort was completed, post quarter, at the end of October;

The second phase (depth) data is expected to be delivered during the 1st qtr of 2016.

Financial Performance

Net Revenues

Realized Net Revenues of US$1.8MM (US$45.91/boe) and a Netback of US$1.1MM (US$18.36/boe).

Netback

Netback decreased 46% in US$ terms and 43% in US$/boe terms vs previous quarter as a result of lower production volumes and oil prices in the quarter, together with higher Opex as a result of a return to more normalised Opex levels (which had been reduced significantly in the previous quarter due to a reversal of certain Shukheir Marine opex costs as part of the settlement following relinquishment).

Working Capital

Working capital of US$3.9MM, all of which is current;

Repaid US$0.3MM of debt in the quarter;

Collected US$2.1MM in outstanding receivables, equivalent to 4 months; and

Exited the quarter with cash and cash equivalents of US$0.5MM.

Cash and Cash Equivalents

Cash and cash equivalents of US$0.5MM at quarter end reflected a net utilisation of US$2.5MM in the 9 months to September 30, 2015;

US$6.0MM received from restricted cash accounts on completion of the farm out of South Disouq; and

US$2.1MM received from Working Capital reductions.

Subsequent to the Quarter

Strategic Transaction

Completed a Strategic Business Combination between Sea Dragon and Madison Petrogas Ltd.

Operations

Current gross production volumes for North West Gemsa are oil 6,602/boepd and gas and liquids 1,438/boepd;

Current gross production volume for the Meseda asset, introduced as part of the Strategic Business Combination with Madison Petrogas, is 4,753/boepd; and

Signed a contract with Geofisyka Torun for the acquisition of 300km2 of 3D seismic data on South Disouq.

Processing and Treating Agreement signed by all parties for North West Gemsa gas. This will allow the Company to recognize and receive revenues attributable to gas sales going forward as well as collecting backdated revenues from February of 2013.

Strengthened board and management team with significant industry, technical and capital markets expertise.

Paul Welch, President & CEO of SDX Energy commented:

"These quarterly results represent the final set of results as our former entity Sea Dragon Energy. The transaction we completed post period to create SDX Energy has formed a company with a much stronger platform for growth based on a greater volume of low cost production and a significantly stronger balance sheet with no debt. We have a highly active and fully funded work programme ahead of us which includes potentially transformational exploration wells in both Egypt and Cameroon. We have a very focused strategy supported by a strengthened board and management team and we look forward to the future with excitement and confidence."

KEY FINANCIAL & OPERATING HIGHLIGHTS

THREE MONTHS ENDED SEPTEMBER 30

NINE MONTHS ENDED SEPTEMBER 30

$000s except per unit amounts

Prior Quarter (1)

2015

2014

2015

2014

FINANCIAL

Gross Revenue

3,759

2,848

11,186

10,972

38,684

Royalties

(1,976)

(1,058)

(6,246)

(4,781)

(22,119)

Net Revenues

1,783

1,790

4,940

6,191

16,565

Operating Costs

336

(651)

(2,639)

(1,066)

(6,019)

Netback (2)

2,119

1,139

2,301

5,125

10,546

Net Income/(Loss)

230

(1,755)

(1,207)

(2,043)

(2,490)

per share

0.00

(0.00)

(0.00)

(0.01)

(0.01)

Funds from operations

767

(1,152)

(77)

(106)

2,816

per share

0.00

(0.00)

(0.00)

(0.00)

0.01

Cash, end of period

494

490

1,789

490

1,789

Working capital

2,838

3,911

6,317

3,911

6,317

Capital expenditures

270

781

(349)

1,239

5,519

Total assets

29,145

28,258

45,587

28,258

45,587

Shareholders' equity

25,644

23,925

32,208

23,925

32,208

Common shares outstanding (000's)

376,459

372,484

376,459

375,119

376,459

OPERATIONAL

Oil sales (bbl/d)

719

674

1,248

794

1,381

Gas sales (mcf/d)

-

-

855

-

942

NGL sales (bbl/d)

-

-

21

-

21

Total boe/d

719

674

1,412

794

1,560

Oil sales volumes (bbls)

65,434

62,031

114,839

216,868

377,127

Gas sales volumes (mcf)

-

-

78,642

-

257,310

NGL sales volumes (bbls)

-

-

1,936

-

5,811

Total sales volumes (boe)

65,434

62,031

129,884

216,868

425,822

Brent oil price ($/bbl)

61.72

50.26

101.87

55.24

106.55

Net realized price ($/boe)

57.44

45.91

86.12

50.59

90.85

Royalties ($/boe)

30.19

17.06

48.09

22.04

51.95

Operating costs ($/boe)

(5.13)

10.49

20.31

4.91

14.13

Netback ($/boe)(2)

32.38

18.36

17.72

23.64

24.77

(1) Denotes the three months ended June 30, 2015

(2) Netback is a non-GAAP measure that represents sales net of all operating expenses and government royalties. Management believes that netback is a useful supplemental measure to analyze operating performance and provide an indication of the results generated by the Company's principal business activities prior to the consideration of other income and expenses. Management considers netbacks an important measure as it demonstrates the Company's profitability relative to current commodity prices. Netback may not be comparable to similar measures used by other companies.

Consolidated financial statements with Management's Discussion and Analysis ("MD&A") are now available on the Company's website at www.seadragonenergy.com and on SEDAR at www.sedar.com.

About SDX

SDX is an international exploration, production and development company, headquartered in London, England, UK, with a principal focus on Egypt. In Egypt, SDX has an interest in two production concessions: NW Gemsa and West Gharib both located in the Eastern desert. SDX's portfolio also consists of South Ramadan, a development asset in the Gulf of Suez; South Disouq, an exploration asset in the Nile Delta; and West Bakassi, an exploration block in Cameroon within the prolific Niger Delta Basin.

Advisory

Forward-Looking Statements

Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian securities laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact should be viewed as forward-looking statements. In particular, statements concerning the Parties, the Transaction, the anticipated synergies that will result from the Transaction and the key characteristics of the combined entity and should be viewed as forward-looking statements.

The forward-looking statements contained in this document are based on certain assumptions and although management considers these assumptions to be reasonable based on information currently available to them, undue reliance should not be placed on the forward-looking statements because SDX can give no assurances that they may prove to be correct. This includes, but is not limited to, assumptions related to, among other things: commodity prices and interest and foreign exchange rates; planned synergies, capital efficiencies and cost-savings; applicable tax laws; future production rates; the sufficiency of budgeted capital expenditures in carrying out planned activities; and the availability and cost of labour and services.

By their very nature, forward-looking statements are subject to certain risks and uncertainties (both general and specific) that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Such risks and other factors include, but are not limited to political, social and other risks inherent in daily operations for each of the Parties, risks associated with the industries in which the Parties operate in general, such as: operational risks; delays or changes in plans with respect to growth projects or capital expenditures; costs and expenses; health, safety and environmental risks; commodity price, interest rate and exchange rate fluctuations; environmental risks; competition; failure to realize the anticipated benefits of the Transaction and to successfully integrate the Parties; ability to access sufficient capital from internal and external sources; and changes in legislation, including but not limited to tax laws and environmental regulations. Readers are cautioned that the foregoing list of risk factors is not exhaustive and are advised to reference SDX's Annual Information Form for the year ended December 31, 2014 for a description of additional risks and uncertainties associated with SDX's business, including its exploration activities, which can be found on SDX's SEDAR profile at www.sedar.com.

The forward-looking statements contained in this press release are made as of the date hereof and SDX does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

E&Ps Locking in Cash Flows and Sales Prices OPEC’s agreement to cut production levels has kicked off a rush among shale oil companies to hedge their oil price risk above $50 for 2017 and 2018. The number of E&Ps selling oil for delivery next year has pushed the WTI forward curve into slight backwardation after two years of contango. Compare[Read More…]